Manufacturing is contracting and exports are falling. India's October trade deficit of nearly $21 billion was its worst on record.

And a second round of reforms aimed at liberalising the pension and insurance sectors has fallen victim to gridlock in parliament. It is not clear if the measures, long sought by investors, will be passed in the current winter session.

But Chidambaram, who began his second stint as finance minister in August, gives no appearance of being disheartened and as recently as Saturday was confidently predicting he would be able to contain the deficit to 5.3 percent of GDP.

Inside his ministry, officials said the target looks daunting but they have had no word of a revision from the minister. Instead, he has intensified pressure on them to find ways of meeting the target, they said.

Chidambaram's credibility is not yet on the line, said analysts. In fact, perhaps the opposite. His credentials as an economic reformer during two previous stints as finance minister are buying him time to pull India back from the fiscal precipice.